Coronavirus & Pensions: Guidance from The Pensions Regulator
The Pensions Regulator (TPR) is the public body that protects workplace pensions in the UK, and aims to work with employers and those running pension schemes so that employees can save safely for their retirement.
It follows that the recent social and economic shock of the coronavirus pandemic requires TPR to issue guidance for all those involved in this objective, and the first such note was provided last week and can be read here.*
The key theme
In their guidance TPR are clearly aiming to take a practical but robust stance on some of the administrative and logistical challenges posed by the current crisis. Their position is made clear in the following passage of advice to employers:
“We know this is a challenging time for everyone and we recognise the strain this is putting on employers.
We will take a proportionate and risk-based approach towards enforcement decisions, in light of these challenging times, with the aim of helping to get employers back on track and supporting both employers and savers.”
This is very encouraging and shows some welcome understanding of the challenges that so many employers are currently facing.
Some important points for employers to note
Clearly the guidance given by TPR varies dependant on the type of pension scheme(s) operated by the employer, so I would urge each employer to circulate the link to all interested parties within their organisation to ensure understanding and compliance.
Notwithstanding the above, there are some universal items that are certainly worth highlighting:
- Contributions: The TPR guidance is clear that employers need to keep contributing to pension schemes in line with their current commitments, and it follows that employer and employee contributions should still be remitted to the pension scheme within the usual timescales.
- Administrative breaches: It’s clear that TPR acknowledges and understand that the unique pressures of the moment may lead to some inadvertent breaches of the rules over the coming weeks and months. They have accordingly suggested that they will take a “proportionate and fair” approach in response to such an error. This is to be welcomed.
- Employee/ member support: Given recent market volatility, it’s to be expected that many pension savers will be concerned about how this will impact their pension savings, and indeed retirement planning. It’s also possible that some savers might compound any short-term investment losses by making hasty or possibly ill-informed decisions. So it’s very important that – where available – employers can signpost savers to discuss their concerns with a qualified professional.
- Scammers: Lastly, but certainly not least, TPR is concerned about the increased risk of the criminal fraternity using this period of uncertainty to try and separate employees from their retirement savings. Scams in the pensions-savings space have been on the increase since the introduction of Pensions Freedoms last decade, so employers and employees need to be aware of this risk. A good place to check on the validity of a claim in this area could well be the Financial Conduct Authority’s ScamSmart site. We would encourage employers to share these details with savers.
For more information on any of the topics covered, please contact your usual Howden Consultant, or visit our website for further details and contact options.
*Please note: The TPR guidance might be updated at any time, so Howden’s supporting notes in this post might be overtaken by events. They were however correct as on the date of issue (24/03/30).
Steve is Head of Benefits Strategy, Howden Employee Benefits & Wellbeing, and is an award-winning thought leader on Pensions, Employee Benefits, and Human Resources issues. He is occasionally accused of making Employee Benefits interesting.